SaaS Marketing Benchmarks

Author:

Kyle Roof
March 13, 2024

Categories: 

Setting marketing benchmarks is an important first step when designing and implementing a marketing strategy. These benchmarks define your starting point and create quantifiable targets so you know what you expect to achieve and can work to secure long-term results. Benchmarks like customer acquisition cost (CAC), client lifetime value (CTV), and average organic search conversions are commonly used by SaaS businesses.

Every SEO strategy should be subject to continuous monitoring and improvement, where benchmarks provide a fixed marker for you to compare performance against previous results, see where you’re progressing, and determine where you may need further work.

Why Set Marketing Benchmarks as an SaaS Company?

High Voltage uses proven SEO strategies and techniques to develop custom growth plans for each client, backed by our years of knowledge and focus on organic, white hat growth opportunities. If you’re new to marketing benchmarks, it’s worth clarifying that these ‘yardsticks’ relate to your key performance indicators (KPIs) and the results you need to achieve through your SEO and digital marketing to hit your most important goals.

Although several benchmarks are widely used in the SaaS space, you can also define the most relevant parameters to your business, using a clear starting point to keep a close eye on the data behind the revenue. Benchmarks are also a useful resource for competitor analysis. If you know your results per month or quarter and can compare these to your closest competitors, you can target your efforts accordingly. 

Which Are the Best Marketing Benchmarks in SaaS?

As we’ve mentioned, benchmarks are tailored to your business, lifecycle, product offering, and objectives. These marketing tools measure progress objectively, such as seeing how many more visitors your website attracts or calculating how much each click costs in advertising investment.

Next, we’ll run through some of the benchmarks our campaign managers often utilize and what those benchmarks can tell you.

Customer Acquisition Cost (CAC)

Your CAC indicates the real-world cost of acquiring every new customer who purchases a software application or enrolls in a service. The goal is to reduce your CAC as far as possible while increasing the number of new buyers you engage with; a low CAC means you are less exposed to ‘churn,’ which refers to significant costs in order to secure a new customer who only buys a single product.

Our data shows that implementing strategic SEO costs five to twenty times less for every acquired customer. In short, you could spend twenty times more on a pay-per-click (PPC) advertising campaign to gain the same number of new buyers. Breaking down your CAC to a granular level can provide further insights, where you recognize what it costs your business to acquire a new customer through each marketing channel.

Customer or Client Lifetime Value (CLV)

The CLV often goes hand in hand with CACs since this measurement provides context. Extracting your CLV and comparing it to your CAC indicates how much each new customer spends with your business as a ratio of the cost of acquiring that customer.

This matters, because if it costs $5 to gain a new client and they spend an average of $5, your marketing is just about breaking even. However, if that same CAC is measured at $5 but the average CLV is $1,000, you are earning $995 in gross revenue for the cost of every new buyer you attract.

Website Conversion Rates

Conversion rates tell you how many website visitors convert into paying customers. From a content marketing perspective, conversions provide insights into the quality and engagement your content marketing delivers, and whether your website UX prompts interested viewers to act.

Finally, you can also analyze conversions from organic search. If your SEO campaigns leverage highly relevant keywords and present your brand to your ideal audience, you’ll see organic search conversions continue to climb as your content marketing improves your ranking position and brand awareness.

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